1-1 By: Sibley S.B. No. 551 1-2 (In the Senate - Filed March 2, 1993; March 3, 1993, read 1-3 first time and referred to Committee on State Affairs; 1-4 March 8, 1993, reported favorably, as amended, by the following 1-5 vote: Yeas 12, Nays 0; March 8, 1993, sent to printer.) 1-6 COMMITTEE VOTE 1-7 Yea Nay PNV Absent 1-8 Harris of Dallas x 1-9 Rosson x 1-10 Carriker x 1-11 Henderson x 1-12 Leedom x 1-13 Lucio x 1-14 Luna x 1-15 Nelson x 1-16 Patterson x 1-17 Shelley x 1-18 Sibley x 1-19 West x 1-20 Whitmire x 1-21 COMMITTEE AMENDMENT NO. 1 By: Sibley 1-22 Amend S.B. No. 551 by deleting Section (1)(B) of Article 1-23 1.13, page 1, lines 45-48, and substituting the following: 1-24 (B) secured by a pledge of or represent an undivided 1-25 ownership interest in one or more financial assets, either fixed or 1-26 revolving, that by their terms convert into cash within a finite 1-27 time period plus any rights or other assets designed to assure the 1-28 servicing or timely distribution of proceeds or security holders; 1-29 and 1-30 A BILL TO BE ENTITLED 1-31 AN ACT 1-32 relating to excluding certain sums related to asset-backed 1-33 securities from the definition of interest. 1-34 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-35 SECTION 1. Subtitle 1, Title 79, Revised Statutes (Article 1-36 5069-1.01 et seq., Vernon's Texas Civil Statutes), is amended by 1-37 adding Article 1.13 to read as follows: 1-38 Art. 1.13. CERTAIN SUMS EXCLUDED FROM DEFINITION OF INTEREST 1-39 WITH RESPECT TO ASSET-BACKED SECURITIES. (a) In this article: 1-40 (1) "Asset-backed securities" means debt obligations 1-41 or certificates of beneficial ownership that are: 1-42 (A) part of a single issue or single series of 1-43 securities aggregating $1,000,000 or more issuable in one or more 1-44 classes; 1-45 (B) secured by a pledge of or represent an 1-46 undivided ownership interest in a pool of assets, including loans, 1-47 leases, insurance premiums, and credit card or other types of 1-48 receivables; and 1-49 (C) issued by a pass-through entity for a 1-50 business, commercial, agricultural, investment, or similar purpose. 1-51 (2) "Pass-through entity" means a corporation, limited 1-52 liability company, association, general partnership, registered 1-53 limited liability partnership, limited partnership or business, 1-54 grantor or common-law trust under state law, or segregated pool of 1-55 assets under federal tax law that, on the date of original issuance 1-56 of asset-backed securities, does not have significant assets other 1-57 than: 1-58 (A) assets pledged to or held for the benefit of 1-59 holders of the asset-backed securities; or 1-60 (B) assets pledged to or held for the benefit of 1-61 holders of other asset-backed securities issued on an earlier date. 1-62 (b) Notwithstanding Article 1.01 of this subtitle, for 1-63 purposes of this title the term "interest" excludes any sums paid 1-64 or passed through, obligated to be paid or to be passed through, or 1-65 not paid as a result of a discounted sale price to the holders of 1-66 asset-backed securities by a pass-through entity, in connection 1-67 with the original issuance or otherwise, regardless of the 1-68 denomination of the sums under the terms of the asset-backed 2-1 securities. Sums excluded from the definition of interest by this 2-2 article are not subject to Article 1.04 of this subtitle. 2-3 (c) This article does not affect or otherwise apply to 2-4 conventional interest, as defined by Article 1.01 of this subtitle, 2-5 paid, charged, or received on the assets pledged to or held for the 2-6 benefit of the holders of asset-backed securities. 2-7 SECTION 2. The importance of this legislation and the 2-8 crowded condition of the calendars in both houses create an 2-9 emergency and an imperative public necessity that the 2-10 constitutional rule requiring bills to be read on three several 2-11 days in each house be suspended, and this rule is hereby suspended, 2-12 and that this Act take effect and be in force from and after its 2-13 passage, and it is so enacted. 2-14 * * * * * 2-15 Austin, 2-16 Texas 2-17 March 8, 1993 2-18 Hon. Bob Bullock 2-19 President of the Senate 2-20 Sir: 2-21 We, your Committee on State Affairs to which was referred S.B. No. 2-22 551, have had the same under consideration, and I am instructed to 2-23 report it back to the Senate with the recommendation that it do 2-24 pass, as amended, and be printed. 2-25 Harris of 2-26 Dallas, Chairman 2-27 * * * * * 2-28 WITNESSES 2-29 FOR AGAINST ON 2-30 ___________________________________________________________________ 2-31 Name: Chris Williston x 2-32 Representing: Ind Bankers Assoc of Tx 2-33 City: Austin 2-34 ------------------------------------------------------------------- 2-35 Name: David Barbour x 2-36 Representing: Campstead Mortgage Corp 2-37 City: Dallas 2-38 ------------------------------------------------------------------- 2-39 Name: Robert Bass x 2-40 Representing: Campstead Mortgage Corp 2-41 City: Austin 2-42 -------------------------------------------------------------------